The issue of whether student athletes are “employees” and subject to FLSA coverage has been hotly contested for a number of years. The colleges assert the players are amateurs and thus not subject to coverage. The Third Circuit has disagreed with that view and has set forth a test to determine the employee status (or not) of college athletes. The case is entitled Johnson et al. v. National Collegiate Athletic Association et al. and issued from the Third Circuit Court of Appeals.
The Court looked to Supreme Court precedent pointing out that the Supreme Court “has already rebuffed” the attempt “to elevate amateurism to a quasi-legal status.” The Court stated that “for the purposes of the FLSA, we will not use a ‘frayed tradition’ of amateurism with such dubious history to define the economic reality of athletes’ relationships to their schools.” Instead, the Court asserted that there should be “an economic realities framework that distinguishes college athletes who ‘play’ their sports for predominantly recreational or noncommercial reasons from those whose play crosses the legal line into work protected by the FLSA.” That economic realities test should be “grounded in common-law agency principles,” remanding the case back to the lower court.
The appellate court enunciated a test to determine if collegiate athletes can be considered employees. The analysis depends on whether they perform services for another party. Then, the focus is on if that party derived a benefit from those services and if they were performed pursuant to the control by that party. The last factor is whether there was compensation given for the services, whether that compensation is actual or implied or is given as “barter” for in-kind benefits.
One Judge agreed with the result but took issue with the test. He stated that this test “does not adequately probe the distinction between play and work, nor explain how district courts should do so.” The majority disagreed with this analysis, stating that “with professional athletes as the clearest indicators, playing sports can certainly constitute compensable work. Any test to determine college athlete employee status under the FLSA must therefore be able to identify athletes whose play is also work.”
The Court disagreed with the lower court on whether the test to determine whether interns are employees should be utilized. The Third Circuit observed that while interns derive certain benefits (e.g., educational credits) that are not found in an employment context, “the educational and vocational benefits of college athletics cited by appellants as alternative forms of remuneration” including leadership and increased discipline “are all exactly the kinds of skills one would typically acquire in a work environment.”
The Takeaway
I think this is a good result. It seems like a solid test that can be (perhaps not easily) applied to discrete situations. If they are employees, does that mean they receive overtime if they work, or, rather, “play” more than forty hours in a week. We will see what the lower courts and sister Circuits do with this effort to shed light on a thorny issue.
Is it third-and-ten or fourth-and-one…